Joe's Jeans sales surge 33% in Q4 FY'12

Highlights:
Consolidated fourth quarter net sales increased 33% to $33.7 million;
Retail store net sales increased 18%;
Wholesale net sales increased 37%;
Retail same store sales increased 6%; and
Operating income increased to $3.2 million for the fourth quarter of fiscal 2012.

For the fourth quarter ended November 30, 2012, overall net sales were $33.7 million compared to $25.4 million in the prior year comparative period, or a 33% increase. Our overall gross profit for the quarter increased to $15.7 million from $11.7 million in the prior year comparative period, or a 34% increase.

Our overall gross margin in the fourth quarter of fiscal 2012 was 47% compared to 46% in the fourth quarter of fiscal 2011. Operating expense in the fourth quarter of fiscal 2012 was $12.5 million compared to $11.8 million a year ago. Operating expense increased primarily as a result of increased costs related to operating six more stores since the end of our fourth quarter of fiscal 2011.

We generated operating income of $3.2 million compared a loss of $131,000 in the prior year comparative period. Fully diluted earnings per share was $0.03 for the fourth quarter of fiscal 2012 compared to earnings per share of $0.00 in same period a year ago.

Marc Crossman, President and Chief Executive Officer, commented, “We are pleased with our results for the fourth quarter of fiscal 2012. We generated operating income across all four quarters in fiscal 2012, which resulted in an increase to our cash balance and enabled our ability to fund new store openings from cash flow from operations. In addition, the increases in our net sales and gross profits coupled with maintaining our operating expenses all contributed to and had a positive impact on our bottom line.”

Retail

Net sales from our retail segment in the fourth quarter increased 18% to $7.0 million compared to $5.9 million in the prior year comparative period. The growth in retail sales was driven by revenue contribution from growing our store base from 22 to 28 stores in the comparative periods and a 6% same store sales increase.

Gross margins for our retail segment increased to 68% from 65% in the year ago period. Retail operating expense increased as a result of additional expenses associated with expanding our store base compared to the prior year period. Overall, for the fourth quarter, we had operating income of $526,000 compared to $496,000 a year ago for our retail segment.

Mr. Crossman commented, “We continued our upward trajectory in fiscal 2012 from our retail segment. We continue to be pleased with the performance of our new and existing stores, especially with our same store sales increase of 6% in the face of tough promotional activity from our competitors during the quarter and from promotions in our own stores during the year ago comparable period.”